Good afternoon, and thank you for participating in Porch Group's first quarter 2026 conference call. Earlier today, we issued our earnings release and filed our related Form 8K with SEC. The earnings release and today's presentation are available on our investor relations website at ir.porchgroup.com. Before we begin, I'd like to review the company's safe heartbreak statement within the meaning of the Private Securities Litigation Reform Act of 1995, which provides important cautions regarding forward-looking statements. Today's discussion, including responses to your questions, reflects management views as of today, April 28, 2026. We undertake no obligation to update or revise these remarks. We will make forward-looking statements that involve risk and uncertainties, and actual results may differ materially. Please refer to the information on this slide and our SEC filings for additional detail. We will also reference certain non-GAAP financial measures. Reconciliations are included in today's earnings release, and also a replay of this webcast is going to be available shortly after the call on our Investor Relations site. So joining me here today are Matt Ehrlichman, Portia's CEO, Chairman, and Founder, Sean DeBac, Portia's CFO, and Matthew Nagel, Portia's COO.

With that, I'll turn the call over to Matt for his key updates. thank you john good afternoon everyone we are pleased to report a strong start to 2026 q1 results exceeded expectations and we're raising our full year guidance for port shareholder interest revenue gross profit and adjusted ebitda port is now a simpler higher margin fee and commission-based business one that's built to compound premium and cash flow over time without the earnings volatility, often associated with risk-bearing insurance carriers. Last year, we proved out the profitability of our business model. 2026 is the first year with tangible year-over-year comparables for port shareholder interest results, and we demonstrated significant and sustainable growth, especially in insurance services, which delivered 50% year-over-year revenue growth in the quarter. From here, our strategy is straightforward, scale rapidly and with discipline, and continue to invest in the differentiated assets that strengthen our moat, our data advantage, our underwriting and pricing capabilities, and our differentiated products for consumers. Okay, so for the first quarter, we delivered results for port shareholder interest that reflected continued strength in insurance services and continued discipline across the Specifically, you can see here, reciprocal written premium, or RWP, was $114 million, up 18% year-over-year. Revenue was $109 million, up 29% year-over-year. Q1 gross profit was $91 million, resulting in an 83% gross margin. Q1 adjusted EBITDA was $20 million, an 18% margin. Earlier, I said we intend to scale rapidly and with discipline. the clearest way to see that is through our insurance growth engine capacity top of funnel and conversion as well as the latest underwriting results over the next four slides you'll see the progress we've made and importantly after seeing these drivers in sequence i think it becomes clear why we're confident in continued rwp growth acceleration so first here capacity statutory surplus is the key guidepost and you can see the progress over the last year growth of 59 percent and 61 million dollars year over year the takeaway is that the capital foundation is far stronger today and supports our growth plans not just this year but well into the future q1 statutory surplus of 165 million dollars supports north of 800 million dollars in premiums, well above our $600 million RWP target for this year. When including incremental non-admitted assets a little north of $100 million, the Reciprocal then has the ability to support more than $1.25 billion of premium. The Reciprocal's reinsurance program is in place to protect this capital across cycles. On April 1st, the Reciprocal wrapped up a very successful renewal of its reinsurance program. Similar to prior years, this included a panel of 40-plus A-rated partners offering catastrophic weather protection. We're happy to report that the reciprocal will benefit from an approximately 20% decline in costs for excess of loss reinsurance, driven by strong underwriting results and improved risk performance, which further bolsters its surplus, and overall margin in the system. So with capacity in place, the next driver is distribution, and this starts with agency growth. Think of this as a land and expand strategy. We're growing our agency footprint and expanding production across our existing partners locations. That's why we highlight producing agency branch locations. It's a metric we use internally to gauge distribution depth. As we expand reach at existing agencies, this translates to quote volumes. For Q1, you can see here, producing agency branch locations increased 181% year over year, while quote volumes grew 69% year over year and improved on an absolute basis for the sixth straight quarter. All in, the funnel is expanding and we're increasing the pool of potential new customers. Moving down the funnel, conversion is the lever that turns quote volumes into new customers and premium. The reciprocal's stellar pricing and underwriting results means we have more margin in the system than other carriers. Given that and our understanding of the elasticity of the conversion rate curve, we can take targeted actions like those we started in November to bring in more low-risk consumers and grow premium at our targeted rates while maintaining the reciprocal's exceptional underwriting outcomes and profitability. In the chart here, you can see the clear step-up in conversion that began in Q4 following the activation actions. That improvement continued into Q1, and year-over-year conversion rates have almost doubled. Note that we've only seen a 5% year-over-year decline in premium per new customer while producing these Q1 gains. at the start of 2026 we launched porch insurance in texas over time porch insurance will serve as another tailwind for conversion as its product differentiation helps open us up to new segments of consumers all right so now the result and this is probably the most important message today when capacity top of funnel and conversion improve together it shows up in new customer growth As this chart shows, RWP from new customers stepped up meaningfully, approximately tripling year-over-year, which is the clearest proof that the growth engine is working. We're certainly excited about continuing this momentum. We've reached an inflection point for growth, but what's notable is the way we are driving this growth. In Q1, total policies written across new and renewal grew 33% year-over-year. Another clear proof point that the growth engine is on track. Matthew will cover this in more detail later in the call. All right, so we just walked through the premium drivers and now and how the system is designed to deliver rapid growth. And now we move into the discipline and sustainability side of it, which you can see through the Reciprocal's underwriting results. These charts depict the 2025 AMVEST annual market share data. The takeaway is simple. The Reciprocal continues to perform among the best in its peer set. Top quartile nationally and in Texas for the combined ratios. And here's what's so exciting about these combined ratios. This includes all of the margin paid via fees to Porch Group as part of the Reciprocal's expenses. In 2025, Porch's insurance services segment saw a margin of adjusted EBITDA to RWP of 21%. So you can do the math. If you were to reduce the expenses and thus the combined ratio by this amount, it truly is exceptional combined ratio results. Putting all this together, our goal is simple. We aim to drive compounded Porch shareholder interest earnings growth while maintaining strong health at the reciprocal. As we deliver on those two key objectives, we can scale this business rapidly and profitably for decades to come. With that, I'll turn it over to Sean to cover the financials and guidance.

Thank you, Matt. Good afternoon, everyone. I'll start off with a high level summary of our financials. Overall, we're pleased with our first quarter results, which exceeded expectations across reciprocal written premium, revenue, gross profit, and adjusted EBITDA. We raised our outlook for the year, driven by our insurance services segment. Insurance services delivered strong Q1 results, particularly in RWP, driven by new customer additions. The team continues to add agencies and quotes, and we saw a higher quote-to-bind conversion rates, as Matt noted. Two quick housekeeping items before we dive deeper into the results. First, as a reminder, we launched the reciprocal on January 1st, 2025, and we updated our segment reporting at that time. As a result, this Q1-2026 represents the first period with tangible year-over-year comps for RWP, as well as Port Shareholder Interest and Insurance Services financials. And second, related to that, Q1 2025 was the final quarter of the legacy captive reinsurance terms that benefited the prior year quarter by $16 million. So while adjusted EBITDA still grew nicely this quarter, Q1 2025 is our last tough comp. Okay, similar to Matt's remarks, my comments focus on port shareholder interest since generating cash for port shareholders remains our ultimate objective. Under GAAP, we consolidate the reciprocal exchange financials, which are included in the press release and our 10Q. Q1-2026 Port Shareholder Interest Revenue was $109 million. Insurance services contributed 68%, software and data 20%, with the remainder from consumer services. Associated gross profit was $91 million with an 83% gross margin, driven by insurance services' 85% gross margin. Adjusted EBITDA was $20 million, ahead of expectations, with insurance services delivering a 37% adjusted EBITDA margin. Okay, now let's move a little deeper into the segment results, starting with insurance services. Insurance services revenue was $75 million, growth of 50% over the prior year, and exceeding expectations, driven by higher fee-based revenue, with higher RWP volume and new customer additions. As Matt highlighted, premium for new customers almost tripled year over year, and we saw a 33% increase in total reciprocal policies written. Gross profit was $64 million, delivering a strong 85% gross margin. Adjusted EBITDA was $27 million, or a 37% margin. While we continue to see strong incremental EBITDA margins from revenue growth, particularly the fee revenue that has a relatively fixed cost base, the year-over-year margin decline simply reflects the changes to our captive reinsurance terms that I mentioned. Overall, adjusted EBITDA as a percentage of RWP was 24% in Q1, reflecting a strong margin as we scale RWP and continued operating leverage in insurance services. On a trailing 12-month basis, adjusted EBITDA as a percentage of RWP was 20%. Okay, shifting to software and data, as a reminder, most of our vertical software businesses charge per transaction. So results do remain tied to U.S. housing activity, which continues to be at near cyclical trough levels. And we do expect tailwinds as housing recovers. In the first quarter of 2026, results were relatively flat year over year. Software and data revenue was $22 million. Gross profit was $17 million with a 75% gross margin. Adjusted EBITDA was $4.6 million. Consumer services also reflects softer housing conditions. Segment revenue was $15 million, increasing slightly over the prior year. Gross profit was $13 million, an 87% gross margin, and up 390 basis points year over year, driven by mix shift to higher quality revenue. And finally, adjusted EBITDA was approximately breakeven. Moving now to the balance sheet, we ended Q1 with cash plus investments of $134 million, up $13 million from December 31st, 2025. Port shareholder interest cash flow from operations was $20 million in the quarter. As a reminder, cash flow timing is seasonal. We pay interest on our notes in the second and fourth quarters of each year. In March, we exhausted the share repurchase authorized by the Board and repurchased 334,000 shares for $2.5 million, or an average of $7.48 per share. And as a reminder, this was the maximum amount allowed by our 2028 Notes Indenture. Our 2026 notes have a remaining balance of $7.8 million, which we expect to settle at maturity on September 15, 2026, with cash from the balance sheet. Okay, and shifting to our 2026 guidance for port shareholder interest, our 2026 target of $600 million organic RWP represents 25% year-over-year growth. Given the strong start to the year, we are raising our guidance for revenue, gross profit, and adjusted EBITDA. We are raising our revenue guidance to a range of $495 million to $507 million, representing 20% year-over-year growth at the midpoint, up 400 basis points versus prior guidance. We are raising our gross profit guidance to a range of $401 million to $413 million, still with an 81% gross margin at the midpoint. We are raising our adjusted EBITDA guidance to a range of $103 million to $109 million, still a 21% adjusted EBITDA margin at the midpoint. From a modeling perspective, we continue to expect trough-like U.S. housing conditions and thus flattish year-over-year results in software and data and consumer services with the guidance increase attributable to strength and insurance services. And I'll now hand over to Matthew to provide a strategic update and a KPI review.

Thank you, Sean. I'll start by giving a brief business update and then dig into our KPIs. I first want to touch briefly on AI, both how we're using it and why we believe it strengthens rather than threatens our position. Across Porch, AI is meaningfully improving our engineering velocity and our operations. Our engineers are shipping faster and with higher quality, and we are seeing productivity gains that are fundamentally changing how we build software. In customer support, AI is now handling a significant share of initial customer contacts, reducing costs and improving response times. We are seeing real productivity gains across the business. On the disruption question, let me be clear. In insurance, AI does not change the fundamental nature of what we do. Insurance is a balance sheet promise. It is regulated, capital intensive, and requires real financial backing. AI will make underwriting claims and customer interactions more efficient. And we are investing aggressively to lead there, but it does not alter the structure of the industry or eliminate the need for the product. We think we are well positioned here. So why do we think our vertical software businesses are well positioned in an AI world? Well, these are systems of records built on decades of real transaction data inside regulated industries where compliance, audit trails, and security are non-negotiable. They are the bones of a home purchase or a refinance transaction and are not optional tools. Our customers rely on them deeply, which shows up in high NPS scores, and we wrap meaningful services around the software itself. For inspectors, that includes payment processing, warranties, recall check monitoring, and a call center, making us much harder to displace in a standalone SaaS product. And we are not standing still. We are investing and innovating faster than we ever have. In our inspection software, we're using AI to improve report quality and speed. Defect detection, narrative assistance embedded directly into the workflow inspectors already use. In Rhino, our title insurance software, we're applying AI to high-stakes workflows like reconciliation, verification, and fraud monitoring, where accuracy and auditability are everything. In Flowify, our mortgage point of sale platform, we're moving toward letting a bowler generate a pre-approval letter from their phone in just a few clicks. Lender customers are expressing real excitement and willingness to pay for this as a premium feature. Finally, we believe AI will disproportionately benefit companies with unique data assets like ours. Underlying our entire business is our data platform with proprietary data covering approximately 90% of U.S. residential properties and early insight into 90% of homebuyers each month. Simply put, AI is additive to Porch's long-term position. Let's move to Q1 insurance KPIs. Reciprocal written premium was $114 million, ahead of expectations, and up 18% versus prior year. Reciprocal policies written was nearly 48,000 policies, up 33% year-over-year, and continuing the momentum we saw in Q4. RWP per policy written was $2,386. dollars. This was down on a year-over-year basis, but I want to be clear on what's driving this. It is largely a function of mixed shift, not competition or price. The premium per new customer is always less than premium per renewing customer. As new customer growth has accelerated, they represent a larger share of the mix, which pulls the average down. To put a number on it, premium per new customer was only 5% lower on a year-over-year basis, meaning that we have been able to increase conversion rates without meaningful decreases in price or profitability. In total, when you pair the top-of-funnel strength with the conversion rate improvements we've put in place, you arrive at a very strong outcome in new customer RWP, which was three times higher versus the prior year. Moving to software and data, the housing market remains challenging, but that's not slowing our pace of innovations. At the start of the new year, we launched Rhino Product Hub, a new central home for all Rhino products and services. In March, FlowFi released Dynamic Apps 2.0 to allow mortgage teams to tailor borrower applications. We continue to see strong interest in home factors and compelling new data customers, and we'll share more here when we are able to. In terms of software and data KPIs, in Q1, we served approximately 22,000 companies with annualized revenue per company of $3,918. As a reminder, as part of our strategy to focus on larger customers, we sunset certain legacy software products that serve very small contractors, which is expected to lead to a few million-dollar revenue headwind, but a slight positive effect to segment profitability. For Q1, the wind-down resulted in roughly 1,800 less companies in the quarter. However, as you can see from the 8% year-over-year increase in annualized average revenue per company, there was a fairly limited effect on segment revenue. In consumer services, our moving group focus is twofold. drive better monetization per move today, and build a scalable demand engine for the next leg of growth. In Q1, moving groups' upsell and cross-sell efforts drove a 9% year-over-year increase in average revenue per move. On the demand side, we're investing in exciting new partnerships, direct-to-consumer expansion, and the Moving Place platform. Like software and data, we feel our targeted investments in lean cost structure positions as well for when the housing cycle turns. As for the KPIs in Q1, we had 69,000 monetized services with annualized revenue per monetized service of $220. I'll now pass it back to Matt to wrap us up.

Thank you, Matthew. Before closing the call, I do want to comment briefly on the macro environment. It's useful to re-anchor on why the homeowners insurance industry remains durable across cycles and why our operating model is built for the long term. First, demand is structurally embedded. The majority of U.S. households have a mortgage where homeowners insurance is required by the lender, regardless of the economy. More broadly, homeowners insurance is carried by nearly 90% of U.S. homes on an annual basis. Not surprising, given the home is often a family's largest financial asset. Second, the homeowner's insurance premium pool has grown through cycles. You can see on the chart on the left, it makes it clear. And it has natural tailwinds. Inflation tends to scale premiums over time. And if the weather gets worse, it only means the homeowner's insurance industry will grow faster. In the current environment, there's talk of a softening market and competition. But we're really not seeing that in any meaningful way. And our Q1 results and strengthening funnel demonstrate that. Third, what's important for Porch is our model. We're able to participate in that growing industry premium pool while separating Porch's financial results and profitability from weather volatility and risk. And lastly, like Matthew just talked about, we don't see AI disruption risk as it relates to the foundational elements of the insurance industry. Again, insurance is a balance sheet promise, not a workflow, while regulation and capital requirements create real moats. We see AI enhancing the advantages for companies with unique data, and we've built our entire business around our data platform. I want to wrap up by briefly reinforcing the most important messages from today. First, we're off to a strong start in 2026. There's no doubt. second we've raised our outlook meaningfully for the year third we're seeing momentum because the insurance growth engine is working capacity distribution conversion are all moving in concert and in the right direction overall policy count is growing rapidly as is premium from new customers and we're accomplishing this while maintaining some of the top underwriting results in the entire homeowners insurance industry. This creates differentiated margins and as a result, a stronger growth engine as we look ahead. Thanks everybody for your time today. I also want to thank in particular my fellow shareholders for their support and belief in our organization. We can't control market volatility, but we can, we will control our focus, strategy and execution. In just a little over a year, we've transformed Porch into a simpler, higher, high-margin, cash-generated business. We built the foundation, and now we scale profitably and fast. With that, John, please open the call for questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. At this time, I would like to remind everyone in order to ask a question, please press star, followed by the number one on your telephone keypad. And if you would like to withdraw your question, simply press star one again. We kindly ask everyone to limit themselves to one question and one follow-up. Our first question comes from the line of Dan Curtis with Stonex. Please go ahead.

Awesome. Thanks. The results obviously speak for themselves, guys. It's a hell of a quarter. I guess the kind of questions I just want to anchor to Matt a little bit, either Matt or Matthew, is there any thoughts on kind of the RWP guide for the year? Is that a little bit higher now just given the increase in revenue and given what you guys put up in Q1. And to sort of unpack what you guys are talking about and I appreciate the color on the premium per new policy written. Obviously, we've all been excited for porch insurance to kind of get launched into the market. But if your blended policy, premium per policy is down because of mix and porch insurance is kind of a higher price point, and obviously you guys can correct me if I'm wrong on that, do we think that like the initial start to this year is actually driven by real strength in the legacy products, even across agents as you turn them back on and porch insurance is then going to be incrementally on top of that and we should see the premium per policy start to blend up as that comes into the market or am I thinking about that wrong? yeah i'll just take the second one first um it's a good question the uh porch insurance will make

a bigger bigger impact as it as we go throughout the year and just ongoing as we have more and more agencies activated and turned on you know using it i do think as you look forward yes the porch insurance you know product you know designed to be give or take 10 percent higher all up price than the homeowners of america you know product and then includes a lot more value for the consumer right the warranty the moving services and then actually higher commission as well for the agencies to have additional incentive and so and as an aside it does also create more margin so you're right as porch insurance becomes you know just continues really through it through its journey and we're very excited about about what's ahead there yes i think that can create tailwinds to your question you know dan on the the premium per new policy overall though i obviously you heard us emphasize it we are very pleased with the gains in conversion rates and how you know how we've been able to just drive you know premium growth without meaningful decreases in the you know the premium per new customer that's it that's you know a big deal and again it just emphasizes you know that we're going to be able to to continue to grow margin across the system you know in really attractive ways the second question on the first one you know sean maybe you can take the RWP, you know, guide, you know, question.

Yeah. Yeah. I mean, I'd say a couple of things. First of all, Dan, thanks for the remarks. You know, I'd say a couple of things. One, it's early in the year. So I'll just note that too. I'd say we were quite pleased with the funnel performance in the first quarter. I think as we talked about throughout each of the metrics, agents, quotes, conversion, we saw outperformance. And so that gives us confidence. Now, we did today increase the revenue guidance four percentage points of growth at the midpoint. So now the revenue guidance is a 20% year-over-year growth. And again, that's all driven by just continuing to add in new customers and the increased confidence that we see there.

And yeah, sorry, maybe I'll just leave it there. um and thanks dan that's fine sean thanks yeah thanks guys i appreciate it and matt i think the point i was trying to make is that you guys did this without really porch insurance filtering into the market yet so um you know obviously fellow results to start here so thank you yeah thank you we appreciate it our next question comes from the line of jason crier with craig hellum capital group please go ahead great thank you guys and i'll echo congrats on a excellent quarter here.

I wonder if you could talk about loss ratios or combined ratio trends for Q1 and just how that compares to historic quarters.

Yeah, I mean, we continue just to perform exceptionally well. Gross loss ratios in Q1 was 24%. Attritional loss ratios, which as a reminder for those on the call is losses, not including catastrophic weather. That was 19%. So, you know, just exceptional results. Actually, you know, the team had gone and looked, you know, we're in the top handful, you know, across the country and Texas in terms of top performers as it relates to loss ratios. Actually, a little tidbit, Jason, that was interesting to us. Some years, you know, Carriers will have attractive loss ratios, and they'll have really bad loss ratios the next year as it bounces around with some volatility. We are the only company in the homeowners insurance industry that's been in the top handful each of the last several years. We think that's really telling. Just there's that consistency of having just exceptional loss ratio and attritional loss ratio results.

Impressive stuff. Thank you. When you look at the levers that you can pull, just in terms of price and promotion, agency commission, stuff like that, I wanted to ask about those levers in terms of existing customers. Any changes to the strategy of the existing customer base and any changes to the trend as far as retention or attrition rates?

I can speak to that. You know, we've taken a number of steps across our distribution strategy and our product strategy to position ourselves for growth. And as Matt said in his remarks, we think we have a growth engine built and now it's time to scale. We are still early in building out our distribution when you consider the number of agents that we have and the number of agents that are available. We always have the lever to tweak price to drive up conversion rate. And I do think there's room there when you look at our cost and our margin structure. We haven't had to be that aggressive so far to be able to hit our growth numbers. And then, as Dan mentioned earlier, we are excited about what Porch Insurance could do. So in terms of the biggest product strategy, being able to have a premium product in the market that has higher commissions, that has the wraparound value of a warranty and moving services and other things to the consumer, we think gives us another lever to drive growth.

Let me just layer one thing on just to make sure that it landed clearly on this topic. Like fundamentally, what the whole advantage comes down to is that we have more margin across the entire system than other carriers do. And it's because we have unique insights about properties, which allow us to be able to win more low risk customers and not win higher risk customers. They're going to have lots of losses. Fundamentally, those insights allow us to create more margin. And you can see that showing up in both the profit margins at Porch Group, plus how much surplus is growing at the reciprocal, because, you know, the margin is the combination of those two things. And that's a big deal, because like Matthew just noted, because you have more margin in the system, if we wanted to, we could tweak pricing down, still create tremendous margin and be able to grow conversion rate and premium faster. Right now, we're very pleased with the outputs that we're seeing in terms of premium growth. But it is certainly nice to be in that position and have those controls.

Great. Thank you, guys. Our next question comes from the line of Jason Helston with Oppenheimer. Please go ahead.

Hey, everybody. How's it going? I guess two questions. Just when the start of the less exciting one. but so like the reciprocal looks like it burned i guess cash flow for operations like about seven million in the quarter how do you think about like where that kind of potentially shakes out i guess annually and you know just just like broadly i guess the point is like over time right obviously you've plenty cushion but that that should number become positive over time and then any update on home factors we kind of haven't really heard you talk about it in a little while it's still a business opportunity or are you more focused on using the data for first party underwriting thanks

why don't sean you take the first one and matthew maybe the second yeah yeah cash flow timing for the reciprocal is just seasonal it's just working capital inflows and outflows the the thing i would point to there is the statutory surplus at the reciprocal increased uh 10 million dollars from the end of Q4 to the end of Q1. And that's with the value of the port shares coming down. So the operating profit from the reciprocal was in the mid-teens there in terms of millions of dollars. That's a big deal in Q1 for the reciprocal. Typically, we're around break-even in the first quarter. And then obviously Q2 is when many of the claims come. So to generate incremental statutory surplus in Q1 is a great result for the reciprocal. It means that the statutory surplus is even stronger to support growth in future years. And so we feel well positioned from that perspective. As a reminder, since I'm talking about the reciprocal surplus, Q2 is typically when we see most of the weather, just as a reminder, and that results in more claims and put some pressure on stats. We do expect that, and we plan for it. And if it doesn't come, that's great. But we do diligently plan for and expect that.

And Jason, I'd be more focused on that, that stats surplus. And the cash, there's lots of cash in the reciprocal.

But really, we're focused on that stats surplus number, like Sean's noting Yeah, over $300 million of cash and investments at the reciprocal. So it's definitely a cash range, I would say.

And then on home factors, you pointed out two opportunities for us. One is how we leverage it internally and then be able to commercialize it externally. Just firstly on internally, we are using it and do see significant impact. And you're seeing that showing up in our results. And we are bullish on the midterm opportunity. The thing that I would point to that gives us confidence, we have a very active and increasing pipeline of carriers who are in the testing process. And the test results are showing in ROI. And I think what we're seeing, which is what we expected, is just that the sales cycle, because you have to go through testing and procurement in some of these carriers, that it will take time to be able to bring those into a formal contract and revenue. With all that said, we remain optimistic that we can build up a business tied to home factors. What we've said in the past remains true, which is we do expect modest early-stage revenue contribution in 2026. That's on track. And then we expect it to build over time. The last thing that I would just mention is there are faster ways we could go to market. you know, so we could partner with certain providers in the space. We've intentionally chosen not to take that route because we're convicted in the long-term opportunity of being able to go direct, and we want to make sure we maintain kind of control over how that data is distributed in the market.

Thank you.

Thank you. Our next question comes from the line of Adam Hotchkiss with the Goldman Sachs. Please go ahead.

Great. Thanks for taking the questions. Matt or Sean, I would love to just go back to price. Matt, I know you took some pricing action, I think, late last year and possibly again in the beginning of this year. Obviously, the conversion rates have improved. Could you parse out for us how much of the conversion rate improvement was things like agency branch location increases and the 181% year-over-year increase that you showed versus the pricing action and maybe just any learnings from the pricing action itself and the sort of visibility that gives you to the conversion curve, that would be helpful.

Yeah. I mean, the growth in agencies really doesn't impact the conversion rate. I mean, certainly as you build and deepen your relationships with those agencies, yes, they will lead with you more. And so it does have influence. But I would say the largest impact in terms of conversion rate is, you know, being able to, you know, take certain actions to be able to be more attractive for, you know, for the right customers. And that's really the key is, you know, through our data and through our insights into where the conversion rate curve is steep and where are those attractive sets of customers, you can be, you know, surgical with being able to increase conversion rate, you know, for the right customers that we want. And you saw the results, which is, and we can do that without having meaningful changes, you know, in the price, you know, per new customer overall. Again, like we highlighted, it's a big deal because, you know, the system is going to be very, very healthy, very, very profitable, you know, and we doubled conversion rate, you know, year over year. But yeah, those actions that we've taken have been the primary drivers, I would say, you know, tied to conversion rate.

But all the work that the distribution team's done with agencies certainly has been a tailwind and has helped there. okay yeah that's really helpful color and then sean just on um rwp seasonality i think the 600 million does imply that things do accelerate a bit year over year into the last three quarters sort of what gives you confidence there and then when we think about just premium seasonality through the last three quarters should we expect that curve to look a lot like last year or any any changes that you would expect appreciate it yeah the seasonality of rwp some of that is, a lot of that is driven by when customers, homeowners buy their homes and

therefore either buy homeowners insurance or in subsequent years, renew their homeowners insurance. And so, you know, obviously most folks are buying their homes, therefore homeowners insurance and renewals in Q2 and in Q3. And then I'd say from there, probably Q4 and then least least amount in q1 actually um so i guess seasonally adjusted this is the you know the lowest quarter q1 is um what gives us confidence in the ramp is the funnel um we talked about you know in q1 we were pleased that really we exceeded expectations of our own expectations even throughout each rate each uh metric in the funnel so we you know agency additions um was was you really strong, that's driving quotes and their end conversion. And so all of those things also bolster future quarters, RWP. And so that's a key thing that we saw in Q1.

Okay, great. Thank you very much.

Thank you. Our next question comes from Delane Farayan Tomasello with KBW. Please go ahead.

Hey, everyone. This is Juan on for Ryan. Thanks for taking the questions and congrats again on the print. Thanks for walking through the productivity gains from AI earlier and how the insurance itself is insulated from AI disruption. But what do you think about that potential top-of-funnel disruption from AI on the insurance side? On the one hand, these tools could affect that great high-intent funnel that you have at closing. But on the other, it also could expand distribution to a broader audience. So do you see Porch as a net AI beneficiary here?

So, yeah, for us, it doesn't really matter where the consumer is buying homeowners insurance. We want to be plugged in to those channels. And so, if digital agencies or our existing agency partners, as they will, get integrated into the various AI systems, that's great we're just we're just one of the options that's there for the consumers and because we have more insights about that consumer zone if it's a lower risk consumer we're going to be a very attractive option you know for them and so you know we we are focused on partnering you know with all of these different great agencies you know that are out there having really deep relationships and partnerships with them being a great partner for them and helping these agencies to grow their business. And we believe, you know, insurance, you know, is a product that is a complex product to buy and that consumers, you know, need and want a licensed agent to work with them. And if consumer behavior changes, you know, we're going to be where those consumers are, you know, whether it's digital agencies, you know, or other. But, you know, being the actual insurance product, you know, for us in this role is a great place to be, you know, And being an insurance product that has differentiated data and therefore differentiated pricing is a really great place to be because at the end of the day, consumers need insurance and we're going to be a really good option for them.

Got it. Yeah, that makes a lot of sense. Are there any changes in your appetite to deploy the excess surplus at the reciprocal for M&A?

Perhaps. I mean, we mentioned last quarter that actually we really mentioned several quarters ago that, you know, we're turning on the M&A engine and starting to build the pipeline. And so certainly, you know, we are, you know, we're executing against that part of the strategy. We do expect, you know, over time that when there is the right opportunity, you know, that we will take advantage of it. certainly the capital exists as we talked about today at the reciprocal to be able to execute against you know the right opportunities um you know we're excited about that we're excited about our capabilities to uh to do some really good things there um but we're going to be you know very disciplined and and you know pragmatic about it and make sure that it's you know the first things we do are right right down the middle of the fairway um so but yeah i i do it's certainly certainly an opportunity, and we'll share more when it's the right time. Got it. Thank you. Thank you.

Our next question comes from the line of Timothy D'Agostino with BRID Securities. Please go ahead.

Yeah, hi. Thanks for the commentary, and congrats on the quarter. I just want to touch back on the rollout of the Porsche insurance product, and you all have provided really helpful commentary, But I guess at the start of 2Q, so, you know, in the sample timeline, compared to January when it originally rolled out, could you maybe provide some more color to us on, you know, are you seeing more agents interact with it? Are you getting better feedback? Just overall, just color, you know, as we enter the second quarter with this product, you know, what agents are saying and maybe what homeowners are saying. That would be great color.

Sure. We remain excited about the porch insurance offering that we just rolled out here a little while ago to agents. And what I would say is there's a lot of excitement from the agents. We're learning a lot from having the product in market. and we do expect it to ramp over time, both as we get new policies in and then we get renewal policies there. Some of what agents are excited about, it is the only product in the market that has a warranty attached to it. It is also a product that is designed for homebuyers in that we provide free moving services and a moving concierge. Agents are also excited about the premium commission that we can afford to pay as part of the porch insurance product. And so all of that has generated energy and excitement in the industry. And I think it will just take time as we build up our book, you know, the HOA book we've built up over, you know, 15 years now. And so we're going to start building, and that has already started to happen.

Okay, great. And then I just want to turn to software and data and consumer services. I know there was some color about kind of the go-forward plan there, but I guess when we do start to see an unthawing in the housing market, should we expect the annualized average revenue per company and revenue per monetized transaction to continue to increase. Just kind of getting a better understanding of how we should think about these KPIs when we get to a point when the housing market starts to unthaw a little bit.

Sure. So I'll separate from software and data KPIs versus consumer services. The software and data is more closely tied to transaction volumes in the housing market. As Sean mentioned in the comments, most of those software services are priced on a per-transaction basis. And so we do expect that as housing market activity picks up, you would see an increase in the average revenue per company because each of those, on average, those companies will do more transactions. We have taken steps over the last couple of years as the market has been slow to position those companies for growth. And so we've invested in innovation, we've invested in pricing. And so we do believe that as the housing activity picks up, we will see top-line growth and that most of that top-line growth can flow to the bottom. On the consumer services side, there are some parts of that business that are tied to housing market activity, most notably our moving group. And so you would see some tailwind in moving as housing activity picks up. And we'd see that in the number of transactions, not necessarily in the revenue per transaction.

Okay, great. Thank you so much for taking my questions. Thanks. Congrats on the quarter again.

Appreciate it. Our next question comes from the line of men. Matt Benleet with Cantor.

Please go ahead. yeah good afternoon thanks for taking the question um if you wanted to narrow in on the the forward trajectory of the the metric around agency branch locations i know that was a big driver uh over the last several quarters to build that number but where are we in terms of saturation in your key markets how much more room does that have to grow um as a near-term driver yeah so the i'll take that and now you can add on if there's anything there um i would say we're still relatively early um you know we have invested in building out the distribution team

it's only been fairly recently that we've been at the kind of the full capacity as we built up that team we've also invested in senior leadership there um and we can foresee you know several years of runway with the team that we have. Some of that is still in our core market of Texas, but there's a lot of room in the geographies outside Texas. And then you also have to think that over time, we can expand into additional geographies beyond the ones where we are today. And so I don't see any near-term constraints on our ability to grow aging distribution.

I'm going to just double down on the last point to make sure it stuck, which is Texas, our largest, most mature market, still has a long way to go. Like we have just a fraction of the total agencies. The other states that are newer has, you know, is very early in the number of agencies versus the total. And then, you know, like Matthew just talked about, there's lots of other states we want to expand into. And we're getting to that point where we can start to be able to reopen more states. And that'll be an exciting time, certainly for us, because that just opens up, you know, big new pools of opportunities. But, you know, there's, you know, give or take almost 40,000, I think it is, independent agents. And so there's a lot of opportunity, you know, out there. All right.

Very helpful. And you drove very nice growth in the conversion rates and sounds like that was a big driver in the quarter. But you mentioned to one of the questions earlier that you really haven't necessarily used some of the levers you have there to drive maybe even greater quote and then conversion rates. So what what would you want to see in the market? What would you want to hear from maybe the agents to start using that lever a little bit more aggressively, whether that's through commission rates or just pure pricing of policies?

You know, curious on what you're watching and when or if that might be a greater lever to pull. yeah i mean i think the key thing there it's a really good question the key thing there is that you know we speak for we and and just personally me i just want to do this for a long long time this is the last thing i'm going to do and so you could to your question it's a good one could we grow much much faster this year yes i mean there's plenty of capital there's plenty of quote volume plenty of margin in the system we could grow much faster you know this year but we really want to be able to stack year after year after year after year of really attractive growth expanding margins you know each year at Porsche Group you know for shareholders and then also continuing to grow statutory surplus and so for us to be able to grow like we are while also growing statutory surplus and seeing the margin expansion you know that we're going to be demonstrating you know here this year that combination we believe if you just stack those years it becomes really really valuable you know here over time and we'll just you know prove you know through through the the results you know that we're able to go and and deliver that but for us we think that's you know that turns into a really exceptional and very sustainable you know outcome you know over time and so that's really what we're what we're trying to solve too yes we could grow much faster yes there may be opportunities in the market where we would pull that lever harder but right now i mean you can see you know we're certainly pleased with kind of the type of growth without really having to move the the price per new customer that much you know and be able to uh to get the kind of results that we are all right very helpful thank you thank you and at this time we have no further questions that concludes our q a session i will now turn the call back over to matt ehrlichman for closing remarks i'll just say i appreciate appreciate first of all the questions um thank you all um appreciate those that um that are along this this journey you know with us this is an exciting time for the company you know the um you know the feel at the company is is fantastic the energy is great i do think the teams are executing really well um and are excited about about where we're going it's it's clear to us you know these next several years are going to be really fun years um and appreciate those that are uh that are with us on on that ride have a great day everybody talk to you soon this concludes today's conference call you may now disconnect your lines have a pleasant day